Bitcoin News Today: BTCFi Attracts $175M H1 2025 as VC Focus Shifts to Consumer Apps

Bitcoin’s decentralized finance (DeFi) ecosystem is witnessing a resurgence in venture capital (VC) interest, with the total funding for BTCFi—DeFi built on Bitcoin’s base layer—reaching $175 million across 32 rounds in the first half of 2025. The majority of the capital, according to a report from Bitcoin DeFi infrastructure provider Maestro, is flowing toward consumer-facing applications and demand-driven products, signaling a shift in investor priorities toward usability and real-world utility [1].

This funding highlights the growing recognition of Bitcoin not just as a store of value but as a yield-bearing asset capable of supporting a range of financial services. Of the 32 deals recorded in H1 2025, 20 were directed toward DeFi, custody, or consumer applications, emphasizing the trend toward practical use cases. However, the flow of capital experienced a notable slowdown in the second quarter, with only $44 million raised across 12 deals—a 66% drop compared to the first quarter [1]. The fluctuation underscores the nascent nature of the BTCFi sector and its sensitivity to market dynamics and investor sentiment.

Marvin Bertin, co-founder and CEO of Maestro, pointed out that the convergence of traditional finance (TradFi) and DeFi is accelerating, with BTCFi and Bitcoin-denominated capital markets emerging as a potential nexus. “For the first time since 2009, the critical pieces for on-chain financial apps on Bitcoin are in place,” Bertin said, highlighting the ecosystem’s development in areas such as exchanges, lending, and stablecoins. This evolution, he noted, is transforming Bitcoin from a static reserve asset into a dynamic financial network [1].

Industry observers have also noted the growing collaboration between DeFi and TradFi. Nelli Zaltsman, head of blockchain payments innovation at JPMorgan’s Kinexys, commented that the artificial boundaries between the two sectors are dissolving faster than anticipated, thanks to improved infrastructure and cross-industry cooperation [1].

The BTCFi ecosystem saw a more than 22-fold increase in value in 2024, with total value locked (TVL) surging by over 2,000%. This growth was driven by both infrastructure developments and a significant rise in Bitcoin’s price. The introduction of the Runes protocol in 2024, the first fungible token standard on the Bitcoin blockchain, further catalyzed interest in DeFi capabilities on the Bitcoin network [1].

The emergence of Bitcoin-native staking through protocols like Babylon has also been a significant development, offering new ways for investors to generate yield from their BTC holdings. As the ecosystem matures, the increased utility of Bitcoin is expected to enhance its appeal as both an investment and a functional asset within the broader financial landscape [1].

Source: [1] BTCFi VC funding hits $175M as investors focus on consumer apps (https://cointelegraph.com/news/btcfi-vc-funding-175m-h1-2025-on-consumer-apps)